05/02/08)
AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

Trading Maxim 8 -- Trading the "Wiggles":   MOS's above 1-minute chart breaks down the "wiggles" trade:  set up (CCI minimum), trigger (1-min bar entirely above 8-period moving average), trade (stay in trade until

entire bar closes above 8-period moving average, then trade as many times as possible buying near the moving average and selling at 25 cent gain (500-1,000 shares),

stop trade when entire bar trades below moving average.

Day Trading AAPL, POT, MON, IBM, RIMM, CF, MOS & APA

(04/29/08)
AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

            Many of TSM's high price stocks were diving today.  MON is an example above.  It demonstrates the importance of using a stop loss so as not to ride a stock down.  After a CCI minima is made and "wiggles" are being traded, end the trade sequence--close your long positions-when price closes below its 8-period moving average (red arrow in chart above).

(04/11/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

(04/10/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

            At present, AAPL' business sector is not being accumulated by institutions (lower 9%), while both POT (upper 1%) and MON (upper 7%) are.  APPL provided short periods of opportunity following each CCI minimum.  Note, on the daily chart that AAPL has pulled back to the support of its rising 200-day moving average.  Remember, too, AAPL reports earnings after the close on 4/23.  It should generally rise into the close -- another edge.  Today's highs and lows relative to yesterday's close:  AAPL -$0.84 lower and $3.98 higher, POT -$2.64 lower and $2.58 higher, MON -$1.77 lower and $1.59 higher,.  Obviously, days like we're seeing  over the past trading week, it would pay to buy the close and look to sell a dollar higher the next day. 

(04/09/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

            At present, AAPL' business sector is not being accumulated by institutions (lower 9%), while both POT (upper 1%) and MON (upper 7%) are.  APPL provided short periods of opportunity following each CCI minimum.  Note, on the daily chart that AAPL has pulled back to the support of its rising 200-day moving average.  Remember, too, AAPL reports earnings after the close on 4/23.  It should generally rise into the close -- another edge.  Today's highs and lows relative to yesterday's close:  AAPL -$2.38 lower and $1.05 higher, POT -$2.32 lower and $3.14 higher, MON -$1.68 lower and $2.13 higher,.  Obviously, days like we're seeing  over the past trading week, it would pay to buy the close and look to sell a dollar higher the next day. 

(04/08/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

            At present, AAPL' business sector is not being accumulated by institutions (lower 9%), while both POT (upper 1%) and MON (upper 7%) are.  POT moved higher from the start, making the low of the day in the first few minutes of trading before moving sideways the rest of the day.  The two post-CCI minima periods provided some opportunity for short-term trades. Note how the first hour's high close provided resistance throughout the day.  Today's low for POT fell -$2.10 lower than yesterday's close and its high $4.22 higher.  Obviously, days like we're seeing  over the past trading week, it would pay to buy the close and look to sell a few dollars higher the next day.  The daily chart looks a little overbought now and ready to pullback.

(04/07/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart|  MON Day Chart  |  MON 1-Min Chart

            At present, AAPL' business sector is not being accumulated by institutions (lower 9%), while both POT (upper 1%) and MON (upper 7%) are.  As shown in the plot above, post-CCI minima continue provided some opportunity for short-term trades. Today's low for MON fell -$1.15 lower than yesterday's close and its high $4.90 higher.  MON gapped open then quickly fell through most of the day. 

(04/04/08)

AAPL Day Chart  |  ,AAPL 1-Min Chart  |  POT Day Chart  |  POT 1-Min Chart

            At present, AAPL' business sector is not being accumulated by institutions (lower 9%), while POT is (upper 1%).  As shown in the two plots above, post-CCI minima continue to provide many opportunities for short-term trades. Today's low for POT fell +$3.22 higher than yesterday's close and its high $7.79 higher.  POT gapped open then pulled back during the day, while AAPL ran higher into the midday then reversed down into the close.  One important feature of day trading is to identify potential areas of resistance and support (that's what the prior day's close and 1st hour high and low closes offer).  Additionally, following a CCI minimum, the next bullish run will feature regular pullbacks as traders take profits.  And these pullbacks will most often reverse at regular depths (common Fibonacci percentages).  In AAPL's chart above, areas A, B and C are the 38, 50 and 50% Fibonacci ratios of their respective bullish runs.

AAPL Trading Maxim (7): Significant bullish runs will often follow CCI minima.  These runs will reverse (pullback) to regular depths called Fibonacci ratios.  The most likely are 38, 50 and 62 percent.

(04/03/08)

            At present, AAPL is not being accumulated by institutions (lower 11%), while POT is (upper 1%).  Further, POT is trading more than 5 million shares daily, trading over > $3 range (>$8 today), price more than $100 per share, and is a stock with great fundamentals.  Post-CCI minima continue to provide many opportunities for short-term trades. Today's low for POT fell +$0.93 lower than yesterday's close and its high $48.24 higher.  POT made its bullish run at the open, while AAPL took a little longer.

(04/02/08)

            At present, AAPL is not being accumulated by institutions (lower 11%), while POT is (upper 1%).  Further, POT is trading more than 5 million shares daily, trading over > $3 range (>$8 today), price more than $100 per share, and is a stock with great fundamentals.  Notice the difference in the intra-day patterns for these two stocks.  Post-CCI minima continue to provide many opportunities for short-term trades. Today's low for POT fell +$3.23 lower than yesterday's close and its high $4.90 higher.

(04/01/08)

            AAPL gapped up at the open, made its low of the day in the morning, moved higher until noon, moved sideways for most of the rest of the day then rose into the close. Both CCI minima marked in green provided a nice series of trades ("wiggles") over the following hour or so. Today's low fell +$2.10 higher than yesterday's close and its high $3.16 higher.  The daily chart shows that AAPL has closed its Jan gap but now lies just under the resistance of its 200-day moving average. I still think that AAPL wants to rise into its earnings report due out Wednesday 4/23/08 after the close.

(03/31/08)

            AAPL made its high of the day in the first half hour then turned down until noon. The first CCI minima provided a nice series of trades ("wiggles") over the hour or so. Once again, the 1st hour's high close provided both resistance and support the rest of the day. Today's low fell -$0.49 lower than yesterday's close and its high $2.70 higher.  The daily chart continues indecisive but its late day selling pressure looks like it wants to fall further--perhaps to its falling 50-day moving average. Again, volume was very light. I still think that AAPL wants to rise into its earnings report due out Wednesday 4/23/08 after the close.

(03/28/08)

            AAPL gapped open above yesterday's close then moved higher until noon.  After that saw-toothed down for the rest of the day.  There were five CCI minima that could have been traded carefully.  Notice how the 1st hour's high close offered both regions of support and resistance, and the 1st hour's low a late day target.  It certainly pays to know where these lines are. Today's low fell +$1.35 higher than yesterday's close and its high $4.45 higher.  The daily chart continues indecisive but its late day selling pressure looks like it wants to fall further--perhaps to its falling 50-day moving average. Again, volume was very light. I think that AAPL wants to rise into its earnings report due out Wednesday 4/23/08 after the close.

(03/27/08)

            AAPL after three days of making the low of the day in the first few minutes, the tide reversed today.  There were four CCI minima that could have been traded carefully, but after closing below its 1st hour low close, the move was down for most of the day. Today's low fell -$5.06 below yesterday's close and its high $0.25 higher.  The daily chart continues now looks like it wants to fall further--perhaps to its falling 50-day moving average. Again, volume was light. I think that AAPL wants to rise into its earnings report due out Wednesday 4/23/08 after the close.

 

(03/26/08)

            AAPL for the 3rd day in a row made the low of the day in the first few minutes, moved higher for most of the day, and then traded sideways.  There were two CCI minima that could have been traded with "wiggles" and a breakout above the 1st hour's high close.  Notice how the 1st hour's high close provided support several times during the day.  Today's low fell -$0.34 below yesterday's close and its high $4.73 higher.  The daily chart continues to look bullish as it readies to meet its rising 200-day moving average. Again, it would be nice to see volume pick up a bit.  It's starting to fill the gap formed in late January.  I decided to buy five $130 April Calls for $16.75 a share (AAPL closed at $143.70) {Calls expire in 22 days}.  I'll look to make ~$1 tomorrow.

(03/25/08)

            AAPL again made the low of the day in the first few minutes, moved higher from there, and then fell a bit in the last hour.  Starting ~13:15, breakout above the 1st hour's high close would have been an excellent long trade for the day. Notice how the 1st hour's high close provided support and resistance during the early part of the day.  Today's low fell -$2.20 below yesterday's close and its high $3.57 higher.  The daily chart continues to look bullish as it now readies to meet its rising 200-day moving average. Again, it would be nice to see volume pick up a bit.

 

(03/24/08)

            AAPL made the low of the day in the first few minutes then moved much from there.  Starting ~12:00,  there were a few chances to trade "wiggles" following CCI minimum, but the major trade would have been above the 1st hour's close.  Notice how the 1st hour's high close provided support at its first test and how the Fib ratios formed from the first half day climb provided support during the second half of the day.  Today's low fell $0.37 above yesterday's close and its high $7.58 higher.  The daily chart continues to look bullish as it now readies to meet its rising 200-day moving average. Again, it would be nice to see volume pick up a bit.

(03/20/08)

            AAPL made the high of the day at the end of the day.  Starting ~12:00,  there was a four hour chance to trade the "wiggles" following CCI minimum.  Today's low fell $0.49 below yesterday's close and its high $3.62 higher.  The daily chart continues to look bullish as it readies to meet its falling 50-day moving average. It would be nice to see volume pick up a bit.

(03/19/08)

            AAPL made the high of the day in the 1st half hour then fell for the rest of the day.  There were, however, several chances to trade the "wiggles" following CCI minima.  Today's low fell $3.14 below yesterday's close and its high $1.47 higher.  The daily chart shows AAPL looks bearish for tomorrow.

(03/18/08)

            AAPL gaped open higher and failed to close during the day--a relatively rare event possibly indicative of a change in AAPL trading behavior (only time will tell).  Two of three post CCI minima created great "Wiggle" trading zones.  Today's low fell $2.06 higher than yesterday's close and its high $3.27 higher.  The daily chart shows AAPL looks bullish though I would like to see more volume.

 AAPL Trading Maxim (6): The the high and low close made in the first hour act as areas of support and resistance, especially the first test.

(03/17/08)

            AAPL gaped open lower, meandered for much of the day then closed the gap on a bullish run that began at 1:30 pm.  Three of the four CCI minima marked great "Wiggle" trading zones. Today's low didn't fall below the prior day's close and was +$2.06 higher and its high $1.98 higher.  Note in the chart below, 24 of the last 30 days traded at least $1 higher and lower than the prior day's close.  The minute chart shows both the CCI minima that mark trading zone entries as well as various lines of support and resistance (1st hour hi/lo closes, prior day's close, Fibonacci levels, etc.).   The daily chart shows AAPL continues to consolidate below its 50-day moving average.  Note, too, how the Bollinger bands are narrowing which is often indicative of an impending move (springboard for higher or lower move).

 AAPL Trading Maxim (5): As was said in Maxim (4), it's a relative rare event when AAPL doesn't make both a lower low and a higher high than the prior day's close.  The following chart shows AAPL's close (blue) since the beginning of 2007 and its count over the past 30 trading days of the number of days making a high today that's at least a dollar higher than yesterday's close (green) and similarly the number making a low that's at least a dollar lower (red).  Since the beginning of the year, this 30-day count has produced at least 23 of 30 days (77%) reaching these metrics.  So how can this relationship between today's close and tomorrow's high/lows be exploited?

• Expect the gap opening (either to the high or low side) to be closed;
• Expect the high or low of the day to be made in the 1st hour of trading;
• Expect (in today's market) at least a $1 higher high and $1 lower low than prior day's close;
• Given the above expectations, the following four strategies have an edge

Buy prior day at close (shares or Calls) and immediately put in sell price at  close + $1 (especially useful if you cannot sit at a computer the next day);

Sell into opening gap higher then rebuild position by scaling back in at a series of lower levels: from $1 less than sales price to $3 less than prior day's closing  price;

Buy the opening gap down (>$1 down) and immediately put in a sales price at $1 higher than prior day's close;

Buy today's intra-day low (at least $1 under prior day's close) if price has not yet risen above prior day's close, i.e., has been down trending since the open.

(03/14/08)

            AAPL gaped open higher then fell for most of the day--save the last hour and a half of buying. Today's low fell $3.74 below yesterday's close and its high $2.36 higher.  Note in the above chart, 24 of the last 30 days traded at least $1 higher and lower than the prior day's close.  The minute chart shows both the CCI minima that mark trading zone entries as well as various lines of support and resistance (1st hour hi/lo closes, prior day's close, Fibonacci levels, etc.).  The chart directly above identifies buy/sell zones following CCI minimum (green bars) where one could wait for price to close above its 10-period moving average then trade "wiggles", i.e., 15-19 cent profit targets and re-buying at the 10-period moving average.  Then one waits for the next CCI minimum.

(03/13/08)

            AAPL gaped lower then pushed higher for most of the day--save the last half hour profit taking. Today's low fell $3.03 below yesterday's close and its high $3.47 higher.  The minute chart shows both the CCI minima that mark trading zone entries as well as various lines of support and resistance (1st hour hi/lo closes, prior day's close, Fibonacci levels, etc.).  The chart directly above identifies buy/sell zones following the mid-day CCI minimum (and the close above the 10-period moving average).  One continues to execute these 15-19 cent profit targets until a lower peak is made.  Then one waits for the next CCI minimum.

 AAPL Trading Maxim (4): It's a relative rare event when AAPL doesn't make both a lower low and a higher high than the prior day's close.  Consequently, on an opening gap lower, one can expect the gap to be closed and price to move even higher later in the day--then trade appropriately.  Today's movement is a good example, but glance through the days below to see how often lower lows and higher highs than the prior day's close occur.

(03/12/08)  

            AAPL consolidated its gains today.   The daily chart, with its topping tail, is bearish for Thursday. Today's low fell $2.18 below yesterday's close and its high $1.30 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

(03/11/08)  

            AAPL took off late in the day with the market. Note, the above chart is a 1-minute chart.  If you're day trading AAPL, it's the chart to use.  Too, I've converted the 14-period CCI 5-minute chart to the equivalent 70-period 1-minute chart. The CCI minima still provided an edge for the rise following the CCI minima. Note here how the 10-period moving average provided both support and resistance.  Use it following a CCI minimum by buying near the 10 and selling 15-30 cents higher. The blue arrows mark entry points. The daily chart is very bullish for Wednesday: closing at the top of its daily range. Today's low fell $1.31 above yesterday's close and its high $7.79 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

(03/10/08)  

            AAPL again made the high of the day in the first hour, but it then fell for the rest of the day. Note, the above chart is a 1-minute chart.  If you're day trading AAPL, it's the chart to use.  Too, I've converted the 14-period CCI 5-minute chart to the equivalent 70-period 1-minute chart. Again, it's difficult to play the long side exclusively on a day like today, but the CCI minima still will provide an edge for the short rise following the CCI minima. Note here how the 10-period moving average has provided both support and resistance.  Use it following a CCI minimum by buying near the 10 and selling 15-30 cents higher.  The daily chart is bearish for Tuesday: closing at the bottom of its daily range, but the low volume testifies to the lack of selling conviction. Today's low fell $2.56 below yesterday's close and its high $1.21 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

 

(03/07/08)  

            Today, AAPL again made the high of the day in the first hour and a half, fell for much of the rest of the day, then pushed higher during the last hour and a half. Note, the above chart is a 1-minute chart.  If you're day trading AAPL, it's the chart to use.  Too, I've converted the 14-period CCI 5-minute chart to the equivalent 70-period 1-minute chart. Again, it's difficult to play the long side exclusively on a day like today, but the CCI minima still provide an edge for the short rise that followed. Note here how the 10-period moving average has provided both support and resistance.  Use it following a CCI minimum by buying near the 10 and selling 15-30 cents higher.  The daily chart is bullish for Monday: closing near the top of its daily range. Today's low fell $1.88 below yesterday's close and its high $2.05 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

(03/06/08)  

            Today, AAPL again made the high of the day in the first hour of trading then fell for much of the rest of the day.  Note, the above chart is a 1-minute chart.  If you're day trading AAPL, it's the chart to use.  Too, I've converted the 14-period CCI 5-minute chart to the equivalent 70-period 1-minute chart. Though it's difficult playing the long side exclusively on a day like today, the CCI minima still provided an edge for a period of time that followed. Note here how the 10-period moving average has provided both support and resistance.  Use it following a CCI minimum by buying near the 10 and selling 15-30 cents higher:  notice how well that strategy would have worked in the initial run up, in the bullish period following the 11:30, the 13:00, the 13:30 and the 15:15 CCI minima.  The daily chart is clearly bearish for tomorrow: closing at the bottom of its daily range. Today's low fell $3.68 below yesterday's close and its high $3.01 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

            AAPL Trading Maxim (3):  On a 1-minute chart, the 10-period moving average provides an area of both support and resistance (and a close above the 10-minute moving average).  Following a CCI minimum, buy near this moving average (buying floor) then sell for a 15-30 cent gain.  {trade 1,000 shares ($62,000 margin account)10x during the day for $1,500 gain, 100x for $15,000}

 

(03/05/08)  

            Today, AAPL again made the low of the day in the first 10 minutes of trading. It then consolidated sideways for much of the rest of the day, using the 1st hour high and low closes as resistance and support over the day.   Too, the CCI minima provided short-term profitable trades during the day.  The daily chart is bullish: closing slightly higher near top of its daily range. Today's low fell $2.37 below yesterday's close and its high $0.52 higher. AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08]. It's only a matter of time before these shares rebound much higher.

(03/04/08)

            Today, AAPL made the low of the day in the first 10 minutes of trading. It then rose for much of the rest of the day, using the 1st hour high close as resistance a few times and the 1st hour low close as support late in the day when CCI made a major minimum.  The daily chart is bullish:  closing near top of its daily range on increasing volume.   Today's low fell $1.33 below yesterday's close and its high $3.15 higher.  AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.66 and 0.79 [next earnings report 4/24/08].  It's only a matter of time before these shares rebound much higher.  To take advantage of the relationship between today's close and tomorrow's high, consider the following option strategy:  buy 3 March 110 Calls at close (today $15.70 or $125.70 share cost when AAPL closed at $124.50 then put in a sell order for the next day at $15.70 + $1.  With an option delta equal to 0.90, this option's value will move at 90% of the share price.  This high probability trade is designed to make $300 ($294 after commission) on $4,710 invested (6.4% in one day).  Note, this option expires in 17 days (3/21/08).

(03/03/08)

        AAPL, once again, made its high of the day in the first few minutes then fell for the next several hour.  After falling most of the day, it rose during the last hour to make a bullish bottoming tail (daily chart).   Today's low fell $7.02 below yesterday's close and its high $0.98 higher.  AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.65 and 0.76.  It's only a matter of time before these shares rebound much higher. 

(02/29/08) 

        AAPL made its high of the day in the first few minutes then fell for the next hour.  Price followed by  riding its low 1st hour close until ~1:30 pm when it then fell into the close.   Today's low fell $5.11 below yesterday's close and its high $0.30 higher.  AAPL's shares continue to remain a bargain here at 2-year PEG ratios of 0.65 and 0.76.  It's only a matter of time before these shares rebound much higher. 

(02/28/08)        

            AAPL put in another very good day, gapping up at the open then rising through most of the day.  Entering the trade above the 1st hour's high close or at the 1:30 CCI minimum would have proved very profitable.  Today's low fell $2.81 above yesterday's close (the gap) and its high $9.24 higher.  One of the actions you should have expected on a day like to day is a sell off in the last hour as traders take profit.  Therefore, one should expect to sell in the last 1 to 1 1/2 hours of trading when AAPL begins to sell off.  AAPL's shares remain a bargain here at 2-year PEG ratios of 0.65 and 0.76.  It's only a matter of time before these shares rebound much higher.  Today's trade is a good example of another AAPL trading maxim:  AAPL's intraday moves are much more profitable than interday moves (gaps); therefore why suffer the downside risk by holding overnight.

AAPL Trading Maxim (1):  AAPL's intraday moves are much more profitable than interday moves (gaps); why suffer the downside risk by holding overnight.

       

(02/27/08)

    Overnight, you might miss a large bullish gap opening (like tomorrow 02/28/08).  This is always a concern because AAPL is one of the best stocks available, and it has a lot of institutional support.  Further, it's way undervalue (PEG ratios less than 1.0) at these prices.  Second, if you buy intraday strength (instead of intraday pullbacks), you're apt to be caught holding shares while AAPL pulls back several dollars quickly (I've seen it lose $2 in two minutes).  If I get caught holding shares here, I like the fact that AAPL is both fundamentally strong and has institutional following, i.e., I know that AAPL will come back soon if I'm forced to hold shares.

Relationships Between Yesterday's Close and Today's High and Low

        The below chart shows the relationship today's high (green) and low (red) versus yesterday's close.  Note, each box is a 10-day moving average.  The white boxed at the top show the relationship between today's high and yesterday's low (again the 10-day moving average).  The idea is to find market truths that a trading strategy can be built around (like the tendency for AAPL to make either the high or low of the day in the first hour of trading.  Two new strategies look profitable: (1) buy the close of the day and sell the following day at close₁ + X where X is just under the 10-day average of the 2nd-day high; (2) opening the day flat, buy today at yesterday's close - Y where Y is just above the 10-day average of the 2nd-day low.  Expected Tuesday High (119.74 + 2.46), Tuesday Low (119.74 - 2.11), and Monday low to Tuesday high (4.43).

AAPL Trading Maxim (2):  More than three-quarters of the time AAPL makes the highs or lows of the day in the 1st hour of trading.        

 The following chart shows that over 52 trading days, ~82% of the days either the low or high of the day occurred in the first 60 minutes--another ~55% of the time they occurred in the last 60 minutes of the trading day.  That's something you can plan a strategy around:  buy the gap down after it reverses or sell into the gap up.

 

What is the Commodity Channel Index (CCI)?

        As a refresher, CCI₁₄ = [(TP - <TP>₁₄) / <TP>_MD ] x 66.7 where TP (typical price) = (High + Low + Close)/3;  <TP>₁₄ is its 14-period (1 min, 5 min or 1 day) moving average; <TP>_MD is TP's mean deviation defined as Σ (abs(TP_i - <TP>₁₄)) / 14 (from i=1 to 14).  So what do all these numbers mean?  That is, what do CCI₁₄ values of -100, of -150 and of -200 mean?

               CCI₁₄ = -100  means  TP = <TP>₁₄ - 1.5<TP>_MD or the current TP is less than the 14-period average TP minus 1.5 mean deviations (a measure of variability)

               CCI₁₄ = -150  means  TP = <TP>₁₄ - 2.25<TP>_MD

               CCI₁₄ = -200  means  TP = <TP>₁₄ - 3.00<TP>_MD

        As CCI₁₄ grows more negative, the current TP becomes increasingly lower than its average value.  It's like a stretched rubber band that increasingly unlikely to extend further.  Instead, it's much more likely to rebound.                              

What is the Relative Strength Index (RSI)?

        Larry Connors of TradingMarkets.com has shown that the 2-period RSI (and its improved strategy for either trading the S&P or forecasting its short-term movement) is much more predictive of future price action than the more conventional 14-period RSI.  Let me show you here what it really means. 

            RSI₂ = 100 - 100 / (1+ RS₂)     where  RS₂ = <up closes>₂ / <down closes>₂    ( <up close>₂ is the average of up closes over the last two periods)

                                                           Note, if <down closes>₂  equals 0, then by definition RSI₂ equals 100.

            RSI₂ = 100 if both periods have up closes and RSI₂ = 0 if both periods have down closes.  If one period closes up (uc) and the other closes down (dc), then

            RSI₂ = 100 - 100 / (1 + uc/dc)

                    = 100 - 100 / {(dc+uc)/dc}

                    = 100 - 100 (dc) / (dc+uc}

                    = 100 {1 - dc / (dc+uc)}

                    = 100 {uc / (dc+uc)}  or RSI₂ (or for that matter any number of periods) is the percentage of the up close (or average up close)

Note, both uc and dc are positive (absolute) values.